Chile – Election polls and market

Chileans will go to the polls on November 17 to elect their next president. Former President Bachelet maintains the lead in latest opinion poll.

The question, to many, is not whether the Nueva Mayoria (New Majority) pact’s candidate will win, but whether the centre-left New Majority opposition coalition, which brings together a group of opposition parties, will return to power. The coalition is led by the Socialist Party (PS) and the Christian Democratic Party (DC), who reached an electoral agreement with the Communist Party.Bachelet, a socialist and a doctor, ruled the country as President from 2006 to 2010, with an 80% approval rating.She then served as Executive Director of United Nations Women, until she stepped down and returned to her country after accepting to run for the November 2013 Presidential election, with a 70% rate of approval.Bachelet became Nueva Mayoria’s candidate after defeating two representatives of her coalition. Her return to politics raised concerns among centre-right contenders. The former Chilean President’s charisma and popularity seem to be the cause of an inferiority complex among her political opponents. Of course, the centre-right Alianza coalition, which groups together the far-right Union Democrata Independiente (UDI) and the moderate Renovacion Nacional (RN), rules out the possibility of defeat.It was not easy to find a candidate for the presidential campaign. Voters’ participation was low in June’s primaries. Pablo Longueira, the UDI candidate, the former Minister of the Economy, beat Andres Allamand from RN, who did not take the defeat well.A few weeks later, Longueira withdrew abruptly, after disclosing he was suffering from severe depression. The election of Evelyn Matthei put an end to the infighting between UDI and RN after Longueira’s withdrawal. She was Labour Minister in President Sebastian Piñera’s cabinet. She is the daughter of a former military regime general just like Michelle Bachelet. A few months before being proclaimed Alianza’s new presidential candidate, she announced she had decided to quit politics, since the growing rift with the UDI, her party, had deepened. Will a last-minute candidate be able to compete with an opponent like Bachelet? The other candidates seem to have even less chances to move into La Moneda Palace, with the exception of Marco Henriquez Ominami. He stands out. He is the founder of Chile’s Progressive Party. In 2010, in his first presidential race, he arrived third with 20% of the vote. Since then however, the number of his supporters seems to have decreased.

More growth and less inequality

Bachelet will have to convince the electorate that her coalition will be able to improve income distribution and reduce inequality. During Piñera’s presidency, Chile’s economy increased by expanding trade with Asia. His administration also increased revenues thanks to the rising prices of the minerals exported. Piñera was convinced that the free market is the element that can balance conflicts of interest.Despite a relevant 6% economic growth, the policies implemented to reduce Chile’s high rates of social inequality have been ineffective. Inequality is the country’s real thorn in the flesh. The richest 10% earn 27 times more than the poorest 10%, according to the Organization for Economic Co-operation and Development (OECD) report (Growth projections for 2013). World Bank data show that GDP per capita exceeds $15,000 per year. This implies that the monthly income of a four-person family in Chile is $5,000, which contradicts the average wages and the fact that only 0.11% of the population can save almost 30% of their income.According to OECD official Gini coefficient data, Chile is the country with the highest level of inequality among OECD’s 34 members, with an index of 0.55. The Gini coefficient is a number between 0 and 1, where 0 corresponds to perfect equality (everyone has the same income) and 1 corresponds to perfect inequality (one person has all the income). If this coefficient is correlated to data from the Internal Revenue Service, it rises to 0.63: the highest in Latin America. Given that, the mantra of political forces, more work means more equality, does not correspond to reality.The problem now is to find a way to reduce social inequalities. Bachelet has listed several points on her political program. She pledged to draft a new Constitution. In particular, she intends to reform the controversial binomial election system, which is not very representative in Congress – despite the pledge, she hasn’t offered details. Bachelet also promised to take initiatives to improve the health system, and implement a free and fair public education system: a priority for Chileans.The ruling party and the opposition agreed to change the electoral system, but only after November’s election. As the country’s current economic situation is not improving, the Coalition will have to do its best to convince the electorate that they will be able to implement the reforms their candidate has promised. The votes of millions of young people who have never voted before are at stake. Many have never been to the polls because politically disaffected. People distrust the current social model that transforms “citizens into individuals or users” with conflicting interests, a society where institutions act in order to “divide” and “to worsen differences, inequality, and segregation.” Increasing growth and at the same time guaranteeing fair income distribution is not an easy task. The Government’s initiatives have often turned out to be ineffective in the long run, as were the policies aimed at rewarding the small minority of the wealthiest. (A.B.)